Strong sales growth and significantly improved EBITDANet sales amounted to SEK 610 million (521), an increase of 17.1 percent. The organic change in net sales was 2.7 percent. Structural

M I DSONA AB (PUBL) *CORPORATE REGISTRATION NUM BER 556241 -5322 I NTERI M REPORT, JANUARY-MARCH 2018 1

Strong sales growth and significantly improved EBITDA January–March 2018 (first quarter)● Net sales amounted to SEK 610 million (521).

● EBITDA amounted to SEK 57 million (45), corresponding to a margin of 9.3 percent (8.6).

● Profit for the period was SEK 39 million (24), corresponding to earnings per share of SEK 0.85 (0.56) before dilution and SEK 0.84 (0.56) after dilution.

● Unrestricted cash flow was negative in the amount of SEK 4 million (30).

● OMX Nasdaq Stockholm decided to transfer Midsona from its Small Cap list to the Mid Cap list, and this was effectuated as of 1 January 2018.

I N T E R I M R E P O R T , J A N U A R Y - M A R C H 2 0 1 8

Key figures, Group¹,2

Jan-Mar 2018 Jan-Mar 2017 Rolling 12-month Full year 2017

Net sales growth, % 17.1 48.9 16.7 23.1

Gross margin, % 34.1 32.1 33.6 33.1

EBITDA-Margin, before non-recurring items, % 9.3 8.6 9.0 8.9

EBITDA margin, % 9.3 8.6 8.1 7.9

Operating margin, before non-recurring items, % 7.7 7.1 7.4 7.2

Operating margin, % 7.7 7.1 6.4 6.2

Profit margin, % 7.9 6.0 5.8 5.2

Average capital employed, SEK million 2,294 2,086 2,214 2,166

Return on capital employed, % 6.8 6.2

Return on equity, % 6.6 5.8

Net debt, SEK million 652 633 652 652

Net debt/Adjusted EBITDA, multiple 3.4 3.6

Net debt/equity ratio, multiple 0.4 0.5 0.4 0.4

Interest coverage ratio, multiple 10.6 6.2 7.1 6.1

Equity/assets ratio, % 55.0 51.9 55.0 54.31 Midsona presents certain financial measures in the interim report that are not defined under IFRS. For definitions and checks against IFRS, please refer to page 14 of this interim report and to pages 114–117 in the 2017 Annual Report.2 The key figures are based on recalculated figures for 2017, see Note 7 Effects on net sales and operating expenses on recalculation to IFRS 15, on page 13. The figures for 2016 have not been recalculated for effects on net sales and operating expenses in connection with conversion to IFRS 15.

Note: This is information such that Midsona AB (publ) is required to publish under the EU Market Abuse Regulation. This interim report was submitted under the auspices of Lennart Svensson for publication on 25 April 2018 at 8.00 a.m. CET.

For further informationPeter Åsberg, CEO +46 730 26 16 32Lennart Svensson, CFO +46 767 74 33 04

SPORTS NUTRITION


Comment by the CEOOrganic and acquisition-driven growthMidsona’s sales increased by 17 percent to SEK 610 million in the first quarter, attributable to growth in all four geographical business areas. This growth has both been acquisition-driven and organic. Currency-adjusted organic growth was 3 percent. EBITDA profit rose by 27 percent to SEK 57 million (45). The EBIDTA margin increased to 9.3 percent (8.6). Profit for the period was SEK 39 million (24).

Good development despite partly challenging conditionsAlthough sales and earnings showed good growth, conditions during the quarter were, in part, challenging. Easter is traditionally a weak period for health products and 2018 was no exception. This year, Easter fell in March, while last year it fell in April. Accordingly, the quarter ended weakly. The historically strong EUR in relation to the SEK has had a significant negative impact on the Group’s gross margin. The ambition is to now adjust prices to fully or partially offset the negative currency effect. Cash flow was also temporarily weak, mainly due to the planned build-up of inventory in con-nection with the change of systems in Denmark and the takeover of the HRA Pharma portfolio at the end of the quarter.

Organic growth in brand portfolioIn recent years, Midsona has chosen to substantially focus the brand portfolio with the ambition of building market-leading brands in three major product categories: Organic, Healthfoods and Personal Care. This focus has been necessary and will continue as an overly complex brand portfolio impacts profitability negatively. In recent years, this has meant that we have had weak or even negative organic growth as we cleared non-performing products and brands. Accordingly, it is all the more gratifying to once again be able to show organic growth. Overall, the Group’s personal care products developed very favourably and, by the end of the quarter, the HRA Pharma agreement including the Nordic license for Compeed also began to have an effect. Healthfoods, with Friggs at the fore, also saw strong development. On the other hand, there was a clear slowdown in growth for the Group’s organic products.

Priorities for the remainder of 2018Midsona’s operations are based on our priority brands and a number of strategic sales assignments in the Nordic region. The principal focus in 2018 will be on continuing to develop these through pro-duct innovation, consumer marketing and effective sales processing. Parallel to this, the integration of Bringwell must be completed, so that the promised synergies can be fully realised. Midsona does not exclude additional acquisitions in the Nordic region, but the focus for acquisitions will now be primarily on Western Europe, outside the Nordic region. Midsona expects sales and EBITDA to increase during 2018.

Peter ÅsbergPresident and CEO

Peter Åsberg, President and CEO

FIRST QUARTER

SEK 610 millionSales

SEK 57 millionEBITDA

9.3 percentEBITDA margin


0

20

40

60

0

70

140

210

0

200

400

600

0

800

1600

2400

Financial information Net salesNet sales amounted to SEK 610 million (521), an increase of 17.1 percent. The organic change in net sales was 2.7 percent. Structural changes also contributed to net sales growth by 13.6 percent, and exchange rate changes contributed by 0.8 percent. Generally, sales were good in all geographic markets, alt-hough Easter week, which is traditionally a weak sales period for the Group’s products, fell in March this year but in April last year. The Group’s eight prioritised brands showed growth of 1.1 percent*.

For Sweden, Norway and Denmark, sales growth was primarily driven by acquired business volumes, while in Finland it was mainly driven by organic growth. In Sweden, several priority brands, as well as licensed brands, achieved strong sales growth. The Swedish market for organic products is still experiencing growth, although at a lower rate than previously. The Norwegian market has, for some time, been in a phase of transition, with lower sales volumes to specialist retailers to the benefit of FMCG and pharmacy chains and is still characterised by sustained growth. Nonetheless, several of the major brands showed strong sales growth, with increased sales volumes, primarily to FMCG retail. In Denmark, sales performance was relatively stable, despite a lower level of service to both internal and external customers with delayed deliveries as a result of challenges encountered implementing a new business system. Systems-related processes are being fine-tuned and service levels to customers are gradually improving. A change in the customer mix can be discerned in the Danish market, where sales volumes to larger, traditional FMCG customers are decreasing in favour of e-commerce customers. The Finnish market is growing stably. Sales of prioritised brands developed strongly in Finland and they strengthened their positions, primarily in FMCG retail, despite increasing competition from both retailers’ own brands and other brand companies.

Gross profit Gross profit amounted to SEK 208 million (167), corresponding to a gross margin of 34.1 percent (32.1). Gross margin improved, mainly as a result of the incorporation of Bringwell’s product portfolio, with its emphasis on categories with generally higher gross margins. In addition, coordinated activities in the supply chain organisation on a Nordic basis began to have a certain impact on the gross margin. In Sweden, however, the gross margin came under severe pressure due to the unfavourable develop-ment in the exchange rate for the SEK against the EUR, which partly offset the Group’s favourable margin development.

Operating profitEBITDA amounted to SEK 57 million (45), corresponding to a margin of 9.3 percent (8.6). Amortisation and depreciation for the period amounted to SEK 10 million (8), divided between SEK 7 million (5) in amortisation of intangible fixed assets and depreciation of SEK 3 million (3) on tangible fixed assets. Operating profit amounted to SEK 47 million (37), with an operating margin of 7.7 percent (7.1).

EBITDA and EBITDA margin improved in Sweden, Norway and Finland. In Sweden, they improved as a consequence of both higher sales volumes and synergies realised from acquisitions progressing as planned, despite major negative currency translation differences in operations during the period. In Norway, they improved as a consequence of good cost control and synergies realised from acquisitions progressing as planned. In Finland, they improved due to strong sales growth and good cost control, as well as synergies realised from acquisitions progressing as planned. In Denmark, EBITDA and EBITDA margins were lower than in the preceding year, mainly due to a weak level of service to customers and temporary additional costs, both related to challenges encountered in switching business systems.

During the period, there was a particular focus on integrating the operations of the acquired Bringwell in Sweden, Norway and Finland to ensure continued good customer and market processing, and to safeguard the takeover of a major sales assignment on a Nordic basis.

Non-recurring itemsOperating profit for the period included no non-recurring items. Nor were there any non-recurring items in the comparative period.

Financial itemsNet financial items amounted to SEK 1 million (negative 6), of which interest expenses on external loans to credit institutions amounted to SEK 4 million (5). Unrealised translation differences on financial receivables in foreign currency affected the net financial items positively by SEK 6 million for the period.

Net sales

Quarter Rolling, 12 months

* For the period January-March, sales for the acquired brand Eskimo-3 are compared with sales in the same period last year, despite Midsona not owning the brand at that time.

EBITDA, before non-recurring items


SEK mSEK m

SEK mSEK m


0

25

50

75

0

50

100

150

Profit for the period Profit for the period was SEK 39 million (24), corresponding to earnings per share of SEK 0.85 (0.56) before dilution and to SEK 0.84 (0.56) after dilution. Tax on the profit for the period amounted to a negative SEK 9 million (7), of which negative SEK 1 million (2) consisted of current tax and negative SEK 8 million (5) of deferred tax. The effective tax rate for the period was 18.3 percent (22.5), which differs from the current tax rate applicable to the Parent Company, mainly due to part of the restructuring reserve from previous years being utilised.

Cash flowCash flow from continuing operations amounted to SEK 2 million (32). Cash flow from operating activities before changes in working capital continued to develop strongly, while changes in working capital weakened, as a result of both increased capital tied up in inventory and in operating receivables. The capital tied up in inventories related to the build-up of inventories, both for increased contingency inventories to ensure an improved level of service to customers and for new distribution assignments. Operating receivables increased significantly as a consequence of both good invoicing in February and March, and several large expected customer payments not being received until after the end of the period.

Cash flow from investing activities amounted to a negative SEK 6 million (2) related to investments in tangible and intangible fixed assets. Unrestricted cash flow was a negative SEK 4 million (30). Cash flow from financing activities amounted to a negative SEK 10 million (0) and was related to amortisa-tion of loans.

Liquidity and financial positionCash and equivalents amounted to SEK 44 million (94) and there were unused credit facilities of SEK 100 million (100) at the end of the period. Net debt amounted to SEK 652 million (633) at the end of the period and remained unchanged compared with the end of the preceding quarter. The net debt/equity ratio was a multiple of 0.4 (0.5). The ratio between net debt and adjusted EBITDA on a rolling 12-month basis was a multiple of 3.4 (3.7). At the end of the preceding quarter, the ratio between net debt and adjusted EBITDA on a rolling 12-month basis was a multiple of 3.6.

Shareholders’ equity amounted to SEK 1,636 million (1,368). At the end of the preceding quarter, shareholders’ equity was SEK 1,550 million. The changes consisted of profit for the period of SEK 39 million and exchange rate differences of SEK 47 million on the translation of foreign operations. The equity/assets ratio was 55.0 percent (51.9) at the end of the period.

Investments Investments in intangible and tangible fixed assets amounted to SEK 6 million (2) and pertained mainly to software in the form of business systems.

Unrestricted cash flow


In Denmark, Urtekram launched two new flavours in its Muesli range – Fruit & Nuts and Super Crunchy.

SEK mSEK m


Other informationFuture prospects Midsona expects sales growth and improved EBITDA in 2018.

Personnel The average number of employees was 381 (322), while the number of employees at the end of the period was 382 (326). The increased number of employees at the end of the period was mainly related to the acquisition of Bringwell in July 2017. During the current quarter, the number of employees decreased by 2.

Parent CompanyGroup-wide management, administration and IT are operated as Group functions in the Parent Company Midsona AB (publ).

Net sales amounted to SEK 10 million (8) and related primarily to invoicing of services provided internally within the Group. Profit before tax amounted to SEK 10 million (8). Financial income increased significantly as a result of positive currency translation differences on financial investments. The com-parison period included dividends from subsidiaries of SEK 65 million and impairment of shares in subsidiaries by SEK 51 million before tax.

Cash and cash equivalents, including unutilised credit facilities, amounted to SEK 100 million (174). Borrowing from credit institutions was SEK 695 million (725) at the end of the period. On the balance sheet date, there were 13 employees (10).

For the Parent Company, SEK 10 million (8), equivalent to 100 percent (100) of sales for the period and SEK 0 million (2), corresponding to 3 percent (10) of purchases for the period pertained to subsidiaries within the Group. Sales to subsidiaries pertained mainly to administrative services, while purchases from subsidiaries mainly pertained to consultancy services and other reimbursements for expenses. All pricing is conducted on market terms.

The shareMidsona’s Series A and B shares are listed on Nasdaq Stockholm’s Mid Cap List under the symbols MSON A and MSON B, respectively.

The total number of shares at the end of the period was 46,008,064 (42,646,480) distributed between 539,872 Series A shares (539,872) and 45,468,192 Series B shares (42,106,608). The number of votes at the end of the period was 50,866,912 (47,505,328), whereby one Series A share corresponds to ten votes and one Series B share to one vote.

During the period January–March 2018, 2,503,972 shares (2,327,768) were traded. The highest price paid for Series B shares was SEK 65.00 (52.00), and the lowest was SEK 51.00 (42.40). On 29 March, the most recent price paid for the share was SEK 56.80 (49.80). For the comparison year, the share price has been adjusted for the new share issue.

Two option programmes were outstanding at the end of the period, the TO2016/2019 and TO2017/2020 series respectively. In the TO2016/2019 series, 50,000 warrants were repurchased in January 2018 and can now provide a maximum of 360,000 new Series B shares on full conversion. In the TO2017/2020 series, 187,000 warrants were outstanding and can provide a maximum of 187,000 new Series B shares on full conversion. At the end of the period, there were a total of 547,000 warrants outstanding that can provide a maximum of 547,000 new Series B shares. On the balance sheet date, the average share price of the Series B shares exceeded the subscription price for the outstanding warrants relating to the TO2016/2019 series but not the TO2017/2020 series, which is why earnings per share after dilution were calculated on the basis of these conditions. For more information about TO2016/2019 and TO2017/2020, see Note 9 on pages 80-82 of the 2017 Annual Report.

Biopharma launched three new products in the Norwegian market.


0250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

3,250

Number of shares traded per month, thousands

MFJDNOSAJJMAMFJDNOSAJJMA0

5

10

15

20

25

30

35

40

45

50

55

60

65

OMX Stockholm Consumer Goods_PI

OMX Stockholm PI

Midsona B2016 2017

Price Turnover

2018

Source: SIX Financial Information

OwnershipStena Adactum AB was the largest shareholder with 23.8 percent of the capital and 28.4 percent of the voting rights on 31 March 2018. The ten largest shareholders in Midsona AB (publ) are shown in the table.

The ten largest shareholders in Midsona AB (publ) Number of shares Share of capital, % Share of votes, %

Stena Adactum AB 10,973,169 23.8 28.4

Handelsbanken Funds 3,711,623 8.1 7.3

The Second AP Fund 2,321,257 5.0 4.6

Nordea Investment Funds 2,168,748 4.7 4.3

LINC AB 2,083,482 4.5 4.1

Cliens Funds 1,844,900 4.0 3.6

BPSS PAR/FCP ECHIQUIER 1,569,000 3.4 3.1

Peter Wahlberg and companies 1,534,568 3.3 3.0

Humle Kapitalförvaltning AB 969,055 2.1 1.9

Danica Pension 817,755 1.8 1.6

Total 27,993,557 60.7 61.9Other shareholders 18,014,507 39.3 38.1

Total 46,008,064 100.0 100.0Source: Euroclear

The total number of shareholders (including nominee-registered) was 6,884 (5,988). In the current quarter, the number of shareholders increased by 454. Foreign ownership amounted to 21.9 percent (18.6) of the shares in the market. More information on the shareholder structure is available at www.midsona.com.

Risks and uncertaintiesIn its operations, the Group is subject to both operational and financial risks that may affect profits to a greater or lesser extent. The assessment is that no new significant risks or uncertainties have arisen. For a detailed discussion of risks and uncertainties, please refer to the 2017 Annual Report.

Change of list for Midsona’s Series A and Series B sharesOMX Nasdaq Stockholm decided to move Midsona from Small Cap to Mid Cap. The change came into effect on 1 January 2018.

Strong price development for Midsona’s shares, up 14 percent, compared with the corresponding period last year.


New distribution agreementA distribution agreement was signed with HRA Pharma to represent some of its brands in the Nordic market, of which Compeed® is the largest individually. The agreement is expected to generate net sales of slightly more than SEK 100 million on an annual basis and commenced in February 2018.

Change in prioritised brandsMidsona works with eight prioritised proprietary brands, all with great potential for growth. It was decided to replace the Tri Tolonen brand with the Eskimo-3 brand as a priority brand effective from 1 January 2018. Eskimo-3, consisting of a series of high-quality dietary supplements naturally rich in omega-3 fatty acids in the personal care products category, was acquired in July 2017.

Tri Tolonen will continue to be developed within the Group. Accordingly, Midsona’s prioritised brands are: Urtekram, Friggs, Dalblads, Naturdiet, Eskimo-3, Kung Markatta, Helios and Miwana.

Significant events following the end of the report period.The Kung Markatta brand was ranked Sweden’s 12th most sustainable brand and the Urtekram brand was ranked Denmark’s second most sustainable brand in the annual independent brand survey Sustainable Brand Index 2018. This is the largest Scandinavian sustainability survey, in which 40,000 Nordic consumers assess corporate sustainability efforts according to several criteria, including the UN principles of sustainability and social responsibility.

Malmö, 25 April 2018Midsona AB (publ)

Board of Directors

Review by auditorThis interim report has not been reviewed by company's auditors.


Financial statementsSummary consolidated income statement

SEK million Note Jan-Mar 2018 Jan-Mar 2017 Rolling 12-month Full year 2017

Net sales 3, 7, 8 610 521 2,235 2,146

Expenses for goods sold 7 –402 –354 –1,483 –1,435

Gross profit 208 167 752 711Selling expenses 7 –110 –94 –409 –393

Administrative expenses –48 –36 –191 –179

Other operating income 1 1 3 3

Other operating expenses –4 –1 –11 –8

Operating profit 3.7 47 37 144 134Financial income 6 0 6 0

Financial expenses –5 –6 –21 –22

Profit before tax 48 31 129 112Tax on profit for the period –9 –7 –30 –28

Profit for the period 39 24 99 84

Profit for the period is divided between:

Parent Company shareholders (SEK million) 39 24 99 84

Earnings per share before and after dilution attributable to Parent Company shareholders (SEK) 0.85 0.56 2.21 1.91

Earnings per share after dilution attributable to Parent Company shareholders (SEK) 0.84 0.56 2.19 1.89

Number of shares (thousands)

On the balance sheet date 46,008 42,646 46,008 46,008

Average during the period 46,008 42,646 44,981 44,141

Average during the period, after full dilution 46,370 42,646 45,366 44,548

Summary consolidated statement of comprehensive income

SEK million Jan-Mar 2018 Jan-Mar 2017 Rolling 12-month Full year 2017


Items that have or can be reallocated to profit for the year

Translation differences for the period on translation of foreign operations 47 –5 36 –16

Other comprehensive income for the period 47 –5 36 –16

Comprehensive income for the period 86 19 135 68

Comprehensive income for the period is divided between:

Parent Company shareholders (SEK million) 86 19 135 68

Friggs launched five healthfoods and a dietary supplement in the Swedish market.


Summary consolidated balance sheetSEK million Note 31 March 2018 31 March 2017 31 Dec 2017

Intangible fixed assets 4 2,176 1,929 2,129Tangible fixed assets 57 54 58Non-current receivables 3 3 3Deferred tax assets 85 74 99Fixed assets 2,321 2,060 2,289Inventories 296 227 272Accounts receivable 281 222 213Tax receivables 6 7 1Other receivables 10 0 9Prepaid expenses and accrued income 18 25 19Cash and cash equivalents 44 94 54Current assets 655 575 568Assets 2,976 2,635 2,857

Share capital 230 213 230Additional paid-up capital 629 466 629Reserves 62 26 15Profit brought forward, including profit for the period 715 663 676Shareholders’ equity 1,636 1,368 1,550Non-current interest-bearing liabilities 655 686 665Other non-current liabilities 5 4 5 5Deferred tax liabilities 220 204 221Non-current liabilities 879 895 891Current interest-bearing liabilities 41 41 41Accounts payable 258 207 220Other current liabilities 5 45 41 50Accrued expenses and deferred income 117 83 105Current liabilities 461 372 416Liabilities 1,340 1,267 1,307Equity and liabilities 2,976 2,635 2,857

Summary consolidated changes in shareholders’ equity

SEK million Share capital Additional paid-up capital Reserves

Profit brought forward, incl. profit

for the period

Shareholders’ equity

Opening shareholders’ equity 1 January 2017 213 466 31 639 1,349

Profit for the period – – – 24 24

Other comprehensive income for the period – – –5 – –5

Comprehensive income for the period – – –5 24 19

Closing shareholders’ equity 31 March 2017 213 466 26 663 1,368Opening shareholders’ equity 1 April 2017 213 466 26 663 1,368


Other comprehensive income for the period – – –11 – –11

Comprehensive income for the period – – –11 60 49New share issue 17 162 – – 179

Issue expenses – 0 – – 0

Issue of warrant programme TO2017/2020 – 1 – – 1

Dividend – – – –47 –47

Transactions with the Group’s owners 17 163 – –47 133

Closing shareholders’ equity 31 December 2017 230 629 15 676 1,550Opening shareholders’ equity 1 January 2018 230 629 15 676 1,550


Other comprehensive income for the period – – 47 – 47

Comprehensive income for the period – – 47 39 86Repayment of warrant programme TO2016/2019 – 0 – – 0

Transactions with the Group’s owners – 0 – – 0

Closing shareholders’ equity 31 March 2018 230 629 62 715 1,636


Summary consolidated cash flow statementSEK million Jan-Mar 2018 Jan-Mar 2017 Rolling 12-month Full year 2017

Profit before tax 48 31 129 112

Adjustment for items not included in cash flow –3 6 32 41

Income tax paid –1 –2 –6 –7

Cash flow from operating activities before changes in working capital 44 35 155 146

Increase (+)/Decrease (–) in inventories –14 15 –19 10

Increase (+)/Decrease (–) in operating receivables –69 –22 –20 27

Increase (+)/Decrease (–) in operating liabilities 41 4 6 –31

Changes in working capital –42 –3 –33 6

Cash flow from operating activities 2 32 122 152Acquisitions of companies or operations – – –64 –64

Acquisitions of intangible fixed assets –5 – –23 –18

Acquisitions of tangible fixed assets –1 –2 –8 –9

Divestments of tangible fixed assets – – 0 0

Cash flow from investing activities –6 –2 –95 –91

Cash flow after investing activities –4 30 27 61Issue expenses – – –1 –1

Loans raised – – 60 60

Amortisation of loans –10 0 –91 –81

Dividend paid – – –47 –47

Cash flow from financing activities –10 0 –79 –69

Cash flow for the period –14 30 –52 –8Cash and cash equivalents at beginning of the period 54 65 94 65

Translation difference in cash and cash equivalents 4 –1 2 –3

Cash and cash equivalents at end of the period 44 94 44 54

Summary income statement, Parent Company SEK million Jan-Mar 2018 Jan-Mar 2017 Rolling 12-month Full year 2017

Net sales 10 8 40 38

Selling expenses 0 0 0 0

Administrative expenses –13 –10 –52 –49

Other operating income 0 – 0 –

Other operating expenses 0 – 0 –

Operating profit –3 –2 –12 –11Profit from participations in subsidiaries – 14 5 19

Financial income 21 5 37 21

Financial expenses –8 –9 –31 –32

Loss after financial items 10 8 –1 –3Tax on profit for the period – – 4 4


M I DSONA AB (PUBL) *CORPORATE REGISTRATION NUM BER 556241 -5322 I NTERI M REPORT, JANUARY-MARCH 2018 1 1

Summary balance sheet, Parent Company SEK million 31 March 2018 31 March 2017 31 Dec 2017

Intangible fixed assets 20 1 15

Tangible fixed assets 3 0 3

Participations in subsidiaries 1,697 1,354 1,697

Receivables from subsidiaries 591 709 574

Deferred tax assets 7 3 7

Financial fixed assets 2,295 2,066 2,278

Fixed assets 2,318 2,067 2,296Receivables from subsidiaries 23 302 19

Other receivables 18 10 16

Cash and bank balances 0 74 31

Current assets 41 386 66

Assets 2,359 2,453 2,362

Share capital 230 213 230

Statutory reserve 58 58 58

Profit brought forward, including profit for the period and other reserves 1,155 1,037 1,145

Shareholders’ equity 1,443 1,308 1,433Liabilities to credit institutions 655 685 665

Liabilities to subsidiaries 38 223 40

Non-current liabilities 693 908 705Liabilities to credit institutions 40 40 40

Liabilities to subsidiaries 171 189 168

Other current liabilities 12 8 16

Current liabilities 223 237 224

Equity and liabilities 2,359 2,453 2,362

Notes to the financial Statements Note 1 Accounting principles

The consolidated accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC). Furthermore, recommendation RFR 1 Supplementary Accounting Rules for Groups, from the Swedish Financial Reporting Board, has been applied.

With regard to the Group, this Interim Report has been prepared in accor-dance with IAS 34 Interim Financial Reporting and the Annual Accounts Act (ÅRL). Disclosures in accordance with IAS 34 Interim Financial Reporting are provided throughout this document. The Parent Company’s accounts are prepared in accordance with the Annual Accounts Act (ÅRL) and recommendation RFR 2 Accounting for Legal Entities, from the Swedish Financial Reporting Board. The statements published by the Swedish Financial Reporting Board concerning listed companies are also applied, meaning that the Parent Company must apply all EU-approved IFRS and statements as far as possible within the frame- work of the Annual Accounts Act, the Pension Protection Act and taking the relationship between accounting and taxation into account.

The ESMA Guidelines for Alternative Performance Measures (APM) are app-lied, entailing expanded disclosures on key figures and performance measures.

The new standards and the amendments and revisions to standards and new interpretations (IFRIC) that came into effect on 1 January 2018 had no impact on the Group’s accounting for financial year of 2018, with the exception of the new standards IFRS 9 Financial instruments and IFRS 15 Revenue from Contracts with Customers.

IFRS 9 Financial instruments, replaces IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 addresses the classification, valuation and accounting of financial assets and liabilities. A project has been carried out in 2017 based on the parts of IFRS 9 that were considered to have a bearing: the classification,

valuation and documentation of financial liabilities and assets and the analysis of the effects on the transition to a new model for reporting of anticipated credit losses according to an “expected loss model”. Based on this, the assessment is that the new standard will not have an impact on the Group’s financial accounts in 2018. The complete accounting principles will be reported in the 2018 Annual Report.

IFRS 15 Revenue from Contracts with Customers replaces IAS 18 Income and IAS 11 Construction Contracts. IFRS 15 contains a principle-based five-stage model of income recognition regarding customer contracts. Midsona has elected to apply a fully retrospective method as its transitional method upon introducing IFRS 15. The basic principle is that recognised income should reflect the anticipated compensation in connection with the fulfilment of the various undertakings under the contract with the customer. Accordingly, income should reflect the fulfilment of contractual commitments and correspond to the compensation to which Midsona is entitled to at the time at which the control of goods and services is transferred to the counterparty. During 2017, Midsona has assessed the effects of the new standard by identifying and analysing the most significant income streams within the Group. The analysis showed that income will essentially be reported at the same time as in the current standard and application, albeit with a reclassification of a non-material nature between the items Net sales, Expenses for goods sold and Sales expenses in the income statement as a result of clarifications of how, among other things, temporary fixed and variable discounts in connection with activities, as well as the right to return expired goods in customer contracts, are to be addressed in the accounts. Accordingly, Midsona makes the assessment that the introduction of IFRS 15 will not imply any signi-ficant effects on the Group’s accounting other than the comparison figures being reclassified in the income statement to improve comparability. That reclassifi-cation is presented in Note 7 Effects on net sales and operating expenses on


recalculation to IFRS 15 in this interim report, see page 13. The application of IFRS 15 entails increased disclosures in the notes of income, as presented in Note 8 Breakdown of income in the interim report, see page 13. The complete accounting principles will be reported in the 2018 Annual Report.

In other regards, the same accounting principles and calculation methods have been applied as in the latest annual report. For detailed information on the accounting principles, please see Note 1 on pages 69-77 of the 2017 Annual Report.

Note 2 Significant estimates and assumptions

Preparing the financial statements in accordance with IFRS requires manage-ment to make estimates and assumptions that affect the application of the accounting principles and the reported amounts of assets, liabilities, income and expenses. The actual outcome may differ from these estimates and assumptions.

Estimates and assumptions are reviewed regularly. Changes in estimates are recognised in the period in which the change is made if the revision only affects that period or within the period in which the revision is made and future periods if the revision affects both current and future periods.

For a detailed account of the assessments made by management in the

application of IFRS and that have a significant impact on the financial state-ments, as well as estimates made that could entail significant adjustments to subsequent financial statements, please refer to Note 33 on page 94 of the 2017 Annual Report. No significant new estimates, assessment or assumptions have been added since the publication of the most recent annual report, with the exception of the estimates and assessments made when introducing the new accounting standards IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers effective from 1 January 2018. These standards were, however, deemed to have an immaterial impact on the financial statements.

Note 3 Operating segments

SEK million Sweden Norway Finland Denmark Group func-tions Group

January–March 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017Net sales, external 294 237 148 141 55 42 113 101 – – 610 521Net sales, intra-Group 30 7 1 1 – – 30 29 –61 –37 – –

Net sales 324 244 149 142 55 42 143 130 –61 –37 610 521Operating expenses (excluding depreciation/amortisation and impairment), external –267 –199 –116 –124 –26 –21 –134 –124 –10 –8 –553 –476

Operating expenses, intra-Group –20 –19 –15 –4 –21 –17 –6 0 62 40 – –

Operating expenses (excluding depreciation/amortisation and impairment) –287 –218 –131 –128 –47 –38 –140 –124 52 32 –553 –476

EBITDA, undistributed 37 26 18 14 8 4 3 6 –9 –5 57 45Depreciation/amortisation and impairment –2 –2 –1 –1 0 0 –2 –2 –5 –3 –10 –8

Operating profit, undistributed 35 24 17 13 8 4 1 4 –14 –8 47 37Financial items 1 –6

Profit before tax 48 31

Note 4 Intangible assets

SEK million 31 March 2018 31 March 2017 31 Dec 2017

Brands 874 834 863

Goodwill 1,267 1,078 1,234

Other intangible fixed assets 35 17 32

Total 2,176 1,929 2,129

Note 5 Fair value and reported in the balance sheet


LiabilitiesFinancial assets measured at fair value via the income statement

Forward exchange contracts, in foreign currency – 0 –

Interest rate swaps 1 1 1

Financial instruments not measured at fair value

Other non-current and current liabilities 48 45 54

Total other non-current and current liabilities 49 46 55

The Group holds financial instruments such as forward currency contracts that are recorded at fair value in the balance sheet. For all contracts, fair value has been determined based directly or indirectly on observable market data, that is, level 2 in accordance with IFRS 13. Liabilities at fair value are recognised as other

long-term liabilities and other current liabilities. In all material respects, the fair value of other financial instruments is consistent with their book value. For further information please refer to Note 32 on pages 92-94 of the 2017 Annual Report.


Note 6 Pledged assets and contingent liabilities


Pledged assets

Blocked bank balances 10 4 11

Net assets in subsidiaries 1,873 1,452 1,647

Others 4 3 4

Total 1,887 1,459 1,662

Contingent liabilitiesGuarantees 19 14 19

Total 19 14 19

Note 7 Effects on net sales and operating expenses on recalculation to IFRS 15, Group

SEK million2018

Q1

Recal-culation

IFRS 15

Recal-culated 2018 Q1

2017 Q2

Recal-culation

IFRS 15


2017 Q3

Recal-culation

IFRS 15


2017 Q4

Recal-culation

IFRS 15

ReCal-culated 2017 Q4

Full year 2017

Recal-culation

IFRS 15

Recal-culated Full year

2017Net sales1, 2, 3 527 –6 521 488 –7 481 579 –6 573 579 –8 571 2,173 –27 2,146Expenses for goods sold 3, 4 –354 0 –354 –328 0 –328 –374 –3 –377 –374 –2 –376 –1430 –5 –1435

Gross profit1, 2, 4 173 –6 167 160 –7 153 205 –9 196 205 –10 195 743 –32 711Selling expenses –100 6 –94 –95 7 –88 –118 9 –109 –112 10 –102 –425 32 –393

Administration expenses –36 – –36 –39 – –39 –62 – –62 –42 – –42 –179 – –179

Other operating income 1 – 1 1 – 1 0 – 0 1 – 1 3 – 3Other operating expenses –1 – –1 –1 – –1 –4 – –4 –2 – –2 –8 – –8

Operating profit 37 0 37 26 0 26 21 0 21 50 0 50 134 0 1341 Agreements with fixed and variable compensation to customers in connection with activities including a contingent undertaking by a customer are reported as selling expense rather than as a reduction of net sales.2 Agreements with fixed and variable central compensation to customers are reported as a reduction in net sales rather than as selling expenses. 3 Agreements under which the customer is entitled to return products are reported as a reduction of net sales rather than as expenses for goods sold.4 Distribution agreements that include profit sharing agreements are reported as part of expenses for goods sold rather than as selling expenses.

Note 8 Breakdown of income, Group

SEK million Sweden Norway Finland Denmark Group func-tions Group

January-March 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017

Geographical areas1

Sweden 285 236 1 1 – – 21 20 –18 –18 289 239

Norway 13 3 141 142 – – 5 4 –14 –3 152 145

Finland 11 5 – – 55 42 13 13 –24 –16 55 44

Denmark 6 0 – – – – 89 78 –5 – 90 78

Iceland – 0 – 0 – – 0 0 – – 0 0

Rest of Europe 8 – – – – – 15 15 – – 23 15Other countries 1 – – – – – 0 0 – – 1 0

Net sales 324 244 149 142 55 42 143 130 –61 –37 610 521Sales channel

Pharmacies 40 9 18 13 5 3 3 – – – 66 25

FMCG retail 193 198 88 83 42 33 76 76 – – 399 390

e-trade/post order 16 9 3 3 2 1 7 4 – – 28 17

Healthfood retailers 24 10 24 23 5 4 18 16 – – 71 53

Other specialist retailers 14 6 9 11 0 0 3 1 – – 26 18

Others 7 5 6 8 1 1 6 4 – – 20 18Group-internal sales 30 7 1 1 – – 30 29 –61 –37 – –

Net sales 324 244 149 142 55 42 143 130 –61 –37 610 5211 Income from external customers is attributable to individual geographical areas according to the country in which the customer is domiciled.


DefinitionsMidsona presents certain financial measures in the interim report that are not defined under IFRS. Midsona considers these measures to provide useful supple-mental information to investors and the company’s management as they facili-tate the evaluation of the company’s performance. Because not all companies calculate financial measures in the same way, these are not always comparable

to the measures used by other companies. Accordingly, these financial measures should not be considered a substitute for measurements as defined under IFRS. For the definition and purpose of each measure not defined under IFRS, please see pages 114–115 in the 2017 Annual Report. The following table presents reconci-liations against IFRS .

IFRS reconciliations, Group

EBITDA – operating profit before amortisation/depreciation and impairment of tangible and intangible fixed assets1


Operating profit 47 37 144 134

Amortisation of intangible assets 7 5 26 24

Depreciation of tangible fixed assets 3 3 11 11

EBITDA 57 45 181 169Non-recurring items2,3 – – 21 21

EBITDA, non-recurring items 57 45 202 190Net sales 610 521 2,235 2,146

EBITDA-Margin, before non-recurring items 9.3% 8.6% 9.0% 8.9%1 There were no impairments on tangible fixed assets and intangible fixed assets included in operating income for each period.

2 Specification of non-recurring itemsSEK million Jan-Mar 2018 Jan-Mar 2017 Rolling 12-month Full year 2017Restructuring expenses – – 16 16Acquisition-related expenses – – 5 5Total – – 21 21

3 Corresponding line in the consolidated income statement.SEK million Jan-Mar 2018 Jan-Mar 2017 Rolling 12-month Full year 2017Selling expenses – – 4 4Administrative expenses – – 12 12Other operating expenses – – 5 5Total – – 21 21

Adjusted EBITDA – EBITDA, rolling 12 months pro forma, excluding acquisition-related restructuring and transaction expenses

SEK million Rolling 12-month Full year 2017

EBITDA 181 169

Acquisition-related restructuring expenses 16 16

Acquisition-related transaction expenses 5 5

Pro forma adjustment -13 -10

Adjusted EBITDA 189 180 Net debt – interest-bearing provisions and interest-bearing liabilities less cash and cash equivalents, including short-term investments


Non-current interest-bearing liabilities 655 686 665

Current interest-bearing liabilities 41 41 41

Cash and cash equivalents¹ –44 –94 –54

Net debt 652 633 652¹ There were no short-term investments equivalent to cash and cash equivalents at the end of the respective period.

Average capital employed – total equity and liabilities less interest-bearing liabilities and deferred tax liabilities at the end of the period plus total shareholders’ equity and liabili-ties less interest-bearing liabilities and deferred tax liability at the beginning of the period divided by 2


Equity and liabilities 2,976 2,635 2,976 2,857

Other non-current liabilities –4 –5 –4 –5

Deferred tax liabilities –220 –204 –220 –221

Accounts payable –258 –207 –258 –220

Other current liabilities –45 –41 –45 –50

Accrued expenses and deferred income –117 –83 –117 –105

Capital employed 2,332 2,095 2,332 2,256Capital employed at the beginning of the period 2,256 2,076 2,095 2,076

Average capital employed 2,294 2,086 2,214 2,166


Return on capital employed – Profit before tax plus financial expenses in relation to average capital employed


Profit before tax 129 112Financial expenses 21 22

Profit before taxes, excluding financial expenses 150 134Average capital employed 2,214 2,166

Return on capital employed, % 6.8 6.2

Average shareholder’s equity – total shareholder’s equity at the end of the period plus total shareholder’s equity at the beginning of the period divided by 2


Shareholders’ equity 1,636 1,368 1,636 1,550Shareholders’ equity at the beginning of the period 1,550 1,349 1,368 1,349

Average shareholder’s equity 1,593 1,359 1,502 1,450

Return on equity – profit for the period in relation to average shareholders’ equity


Profit for the period 99 84Average shareholder’s equity 1,502 1,450

Return on equity, % 6.6 5.8

Unrestricted cash flow – cash flow from continuing operations less cash flow from investing activities, excluding acquisitions/sales of operations and acquisitions/sales of trade-marks and product rights


Cash flow from operating activities 2 32 122 152

Cash flow from investing activities –6 –2 –95 –91

Acquisitions of companies or operations – – 64 64

Unrestricted cash flow –4 30 91 125

Organic change, net sales – Net change in sales between years adjusted for translation effects on consolidation and for changes in the Group structure


Net sales 610 521 2,235 2,146Net sales compared with the corresponding period in the preceding year –521 –350 –1,915 –1,744

Net sales, change 89 171 320 402Structural changes –71 –170 –358 –457

Exchange rate changes –4 –14 –8 –18

Organic change 14 –13 –46 –73Organic change, % 2.7% –3.7% –2.4% –4.2%

Structural changes, % 13.6% 48.6% 18.7% 26.2%

Exchange rate changes, % 0.8% 4.0% 0.4% 1.0%

Urtekram launched coconut milk and coconut cream in the Danish market.


Quarterly data

SEK million 2018 Q1 2017 Q4 2017 Q3 2017 Q2 2017 Q1 2016 Q4 2016 Q3 2016 Q2 2016 Q1 2015 Q4 2015 Q3 2015 Q2

Net sales 610 571 573 481 521 521 522 351 350 352 367 223Expenses for goods sold –402 –376 –377 –328 –354 –337 –348 –223 –219 –219 –226 –121

Gross profit 208 195 196 153 167 184 174 128 131 133 141 102Selling expenses –110 –102 –109 –88 –94 –108 –107 –79 –83 –84 –95 –69

Administrative expenses –48 –42 –62 –39 –36 –42 –44 –32 –31 –31 –27 –21

Other operating income 1 1 0 1 1 3 0 1 1 5 0 3

Other operating expenses –4 –2 –4 –1 –1 –5 –7 –1 –1 0 –8 –2

Operating profit 47 50 21 26 37 32 16 17 17 23 11 13

Financial income 6 0 0 0 0 0 1 0 0 1 0 0

Financial expenses –5 –4 –5 –7 –6 –7 –9 –5 –4 –2 –4 –2

Profit before tax 48 46 16 19 31 25 8 12 13 22 7 11Tax on profit for the period –9 –12 –5 –4 –7 –9 –1 –1 –2 –6 32 1

Profit for the period 39 34 11 15 24 16 7 11 11 16 39 12

Non-recurring items

Non-recurring items included in operating profit – –1 22 – – 7 19 1 – –2 14 –2

Operating profit, before non-recurring items 47 49 43 26 37 39 35 18 17 21 25 11

Depreciation/amortisation and impairment

Depreciation/amortisation and impairment included in operating income 10 10 9 8 8 7 7 5 6 6 6 3

EBITDA 57 60 30 34 45 39 23 22 23 29 17 16

Depreciation/amortisation, impairment and non-recurring itemsDepreciation/amortisation, impairment and non-recur-ring items included in operating profit 10 9 31 8 8 14 26 6 6 4 20 1

EBITDA, before non-recurring items 57 59 52 34 45 46 42 23 23 27 31 14

Unrestricted cash flow –4 49 17 29 30 53 8 –26 16 19 28 23

Number of employees as per the balance sheet date 382 384 386 329 326 322 341 275 285 294 284 156

Helios launched two kinds of porridge in the Norwegian market.


This is MidsonaStrong brandsMidsona is the leading consumer goods company in the Nordic region operating in a growing market for health and well-being. Our attractive portfolio of well-known products, is focused on helping people lead a healthier life. A growing proportion of the product portfolio has an organic profile. The business model is based on strong brands with good market positions, innovation and an effective marketing and distribution structure. Midsona series A and B share have been listed on the Nasdaq Stockholm exchange since 1999, in the FMCG sector.

Clear visionOur vision is to become one of Europe’s leading companies in health and well-being.

Clear strategies• Leading brands in prioritised categories – We work with strong

proprietary brands together with a select number of licensed brands in our current primary geographical markets of Sweden, Denmark, Norway and Finland. Our brands should be ranked in first or second position in their categories and should be available through appropriate sales channels, where we have the best knowledge and opportunities for strong growth.

• Cost-effective value-chain – We work continuously to adapt and streamline the organisation. We continuously assess the pro-duct range from the perspective of profitability and, in recent years, a large number of products have been removed that do not fit into the Group’s strategy or that are deemed not to meet the profitability requirements. A shared supply chain organisa-tion has been implemented in the Nordic region as part of the strategy of establishing an efficient and sustainable value chain.

• Selective acquisitions – Acquisitions are an integral and funda-mental part of our business. We have played a major role in consolidating the market in the Nordic region. Although we will continue to do that, our sights are now set primarily on the rest of Europe. We have demonstrated very good capacity in identi-fying appropriate acquisitions and in integrating and developing operations offering favourable synergies. A process has been conducted to map companies operating in markets in health and well-being in Western Europe.

• Healthy and sustainable culture – We offer products that help people achieve a healthier life and we seek to build on our strong position as the expert in health and well-being. Our brands and products play a fundamental role in those efforts. Being sus-tainable is growing increasingly important. Our customers and consumers impose continuously increasing demands on sus-tainable products. There are strong connections between their interest in organic products and their interest in sustainability. We now receive considerably more questions regarding sustaina-bility than we did a few years ago. We presented our sustainability efforts in a Sustainability Report, included in Midsona’s 2017 Annual Report.

Long-term financial targetsLong-term financial targets set by the Board of Directors of Midsona AB (publ) in the second quarter of 2013. • Net sales growth of 10 percent, through organic growth and

acquisitions. • Operating margin >10 percent. • A ratio between net debt/operating profit before amortisation/

depreciation of intangible and tangible fixed assets (EBITDA) of a multiple <2.

• A dividend over time of >30 percent of profit after tax.

This report is available in Swedish and English. In case of any discrepancies between the Swedish and English versions, the Swedish version is considered the official version.

Financial calendarJUL AUG SEP OC T NOV DEC

Interim Report January–September 2018

25 October 2018

Interim report January-June 2018

20 July 2018

Midsona AB (publ) · Corporate identity number: 556241-5322 · Visiting address: Dockplatsen 16, Malmö, Sweden · Postal address: Box 210 09, SE-200 21 Malmö, Sweden Telephone: +46 40 601 82 00 · [email protected] · www.midsona.com

UrtekramA leading brand in organic food and organically certified body care products, with a broad product portfolio, available primarily through supermarkets in the Nordic region.

Eskimo-3A range of high-quality dietary supple-ments naturally rich in omega-3 fatty acids, which are sold primarily through specialist healthfood retailers and pharmacies in the Nordic region.

FriggsA broad health products brand with a distinct FMCG profile, mainly available in supermarkets in Sweden, Finland and Norway.

Kung MarkattaA leading brand in organic foods, with a broad product portfolio, available pri-marily through supermarkets in Sweden.

DalbladsA series of sports-related products for those who train regularly, as well as elite athletes – sold primarily in supermarkets and by other specialist retailers in Sweden and Norway.

HeliosA leading brand in organic food, with a product portfolio, available primarily through supermarkets and healthfood retailers in Norway.

NaturdietA series of meal alternatives for a healthy lifestyle – sold mainly in supermarkets in Sweden, Finland and Norway. The products are full of vitamins and minerals that the body needs, but always have a low energy content.

MiwanaA series of natural products for the whole family for cold-related nose and throat problems – sold mainly through pharma-cies in Sweden and Norway.

Eight priority brandsMidsona’s operations are based on strong proprietary brands. Six of these play a very central role in the Group’s growth and account for a large portion of sales. These are Urtekram, Friggs, Dalblads, Naturdiet, Eskimo-3 and Kung Markatta. The Helios and Miwana brands are also prioritised.

SPORTS NUTRITION

Documents

Strong sales growth and significantly improved EBITDANet sales amounted to SEK 610 million (521), an increase of 17.1 percent. The organic change in net sales was 2.7 percent. Structural